Panels covered ESG and the changing Canadian ag landscape from national and global perspectives.

The first panel focused on ESG standards in a global context.

IFRS Foundation Montreal office Director Isabelle Mégré, said that in many international markets, like the United States and European Union, sustainability disclosure could soon become standard.

To illustrate how this could affect Canada, she gave the example of a California bill set to take effect in 2026 which would see large companies required to disclose climate-related financial risks, including value chain emissions.

“Canada was worth nine billion in 2023,” she said of Californian export money. “We are actually California’s top agriculture and agri-food export market”

Centre for Agri-Food Benchmarking Founder David McInnes asked the speakers how ESG standards can be created to apply to the disparate sectors of Canadian agriculture.

“The standards are not a one-size fits all as we might think,” Mégré said. “It actually requires a lot of judgment and reflection from new companies that are using it.”

“It might feel like a one-size-fits-all, because there’s one set of standards. But really, when you dig into it, it’s about reflecting on what is affecting your company’s perspectives, your company’s business models.”

“We’re trying to find this common place where it can fit for everybody,” she said.

Canadian sustainability Standards Board Interim Chair Bruce Marchand stressed the importance of having organizations like his remain independent in this process.

“In some countries, the regulator sets the standard and the regulation at the same time,” he said, “and in other countries, the regulator and the standards are separate, but they’re both an arm of government.”

“I want to stress that our board is independent, so it’s not a government and it’s not a government board like our sister boards.”

Mégré closed the discussion by warning that ESG regulation can be very politically polarizing. She said that this has created a fear of backlash among investors wanting to discuss ESG.

The second panel took on upcoming policy such as the Jan. 1, 2025, implementation of the S1 and S2 of the ESG Sustainability Disclosure Standards as well as Bill C-59, which aims to increase greenwashing accountability.

Deloitte Senior Manager of Infrastructure and Capital Projects Michelle Leslie expressed concern over how producers and businesses will have a burden of proof put on them for their sustainability efforts in accordance with Bill C-59. “There’s no standard as to what that burden of proof is,” she said.

Leslie thought definitions of sustainability have not been sufficiently broadened beyond just environmental factors. “If you achieve emissions reductions but it’s at the cost of bankrupting communities, if it’s at the cost of making people poor in the process, then I would say you have failed.”

Pulse Canada VP of Corporate Affairs Greg Northey said ESG goals are not as important to Canadian producers and consumers as other economic development goals.

“From an agricultural sector perspective, we’re still very much focused on how do we become the best, most competitive producer in these global markets,” he said. “And a lot of the time, sustainability, ESG, is not as much an issue.”

United Farmers of Alberta Sustainability Director Selene Munro said there should be more attention paid to cost and scope when creating ESG standards.

“There is a cost to implementing or building or consolidating these standards. Not all programs are built out. There is no understanding of scope.”

“A lot of those organizations will not meet the requirements for reporting because they’re not publicly traded,” said Munro. “The companies that are publicly traded are going to need or require that data from individuals within the supply chain, and that will go down to producers.”

The panelists also highlighted the importance of data collection for influencing public policy.

Before lunch, breakout groups of attendees discussed questions about disclosure standards and a National Index. Following the break, panelists from the breakout groups debriefed on the Importance of consolidation and issues with limited awareness of the standards.

They also spoke to the importance of translating tenets of the International Sustainability Standards Board (ISSB) to be relevant to ag-specific data tracking.

Finally, Centre for Agri-Food Benchmarking Tarra Drevet closed the conference with some words about ESG, sustainability and data collection, stressing the importance of quality information and communication of data.

Drevet communicated an overall note of hope in her closing remarks: “I think we can be optimistic about what’s coming up next.”

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That’s according to a joint report from the Canadian Agri-Food Policy Institute (CAPI) and the University of Saskatchewan’s Global Institute for Food Security on risk in Canada’s agri-food system. The report provides results from the first phase of research the groups are gathering to help provide policy recommendations to solve issues in the agriculture sector. This first phase included a survey of more than 500 farmers, food processors, government personnel, and other agricultural stakeholders on what they’re most concerned about, and what issues should be given priority.

Already a problem

Respondents largely indicated policy, extreme weather, and trade problems were already a reality, and that such problems are perceived to be both chronic in nature and complex. As the report summary details, fewer than 15 per cent of respondents “have confidence in government to solve any of the three, while fewer than 22 per cent say they have confidence in private sector solutions. Thus, the uphill battle will evidently persist for years to come.”

Tyler McCann, CAPI’s managing director, says the survey informing the report gathered perspectives from a good cross-section of farmers, civil society, government and other industry professionals. While the top identified concerns were not themselves a surprise, McCann was intrigued by what appears to be widespread resignation.

“We see policy, extreme weather, and trade as already being a problem, even a difficult or extreme problem, but we seem to think there’s little we can do about it,” he says. “It’s hard to wrap your mind around that. It’s one thing to say were not sure what we’re gong to do about extreme weather…but on the domestic policy front, that is within our control.”

McCann adds that while people generally think Canada is ahead of many other countries on social and environmental issues, only about 30 per cent think we are ahead economically. This suggests governments must re-focus some attention to economics, and better communicate with the agricultural industry about Canada’s economic position.

Optimism and priorities

Despite some resignation, 62 per cent of respondents expressed general optimism about the direction of Canadian agriculture. The report describes that optimism stems in part from the perspective that Canada is well-positioned, or at least fairly well-positioned, to “take advantage of burgeoning markets.”

By comparison, 21 per cent of respondents said they are pessimistic. Higher levels of pessimism were identified in respondents from rural or remote areas, suggesting farmers themselves comprised much of the category.

Another take-away for McCann, however, was overlap between what respondents thought governments and private industry should focus on to improve the sector.

While research and development were rated as a higher priority for the private sector, for example, it was still identified as a priority for government. This, says McCann highlights the opportunity for greater investment and cooperation across the industry – something which is much needed, given the sector’s general habit of operating in silos. The report itself says “the preference for a focus on innovation and productivity is evident across different facets of the agriculture sector. Notably, farmers show the least preference for any one aspect of this, suggesting a wide diversity of opinion.”

Moving forward, McCann says both his organization and Canadian the Global Institute for Food Security intend to produce a “second-phase” report further analyzing these issues, and recommending “what to do about it.”

“The core belief is we need a more ambitious strategic policy solution in this country,” says McCann. “We want to develop how we take these concerns, and bring them to life. We see the risks the sector faces as a space where we need more focused action, and need to work together more.”

Key Findings from the report:

• Asked what the top priorities should be for government, trade policy, climate change adaptation, and research and development take the first three spots. For the private sector, research and development, productivity growth, and business investment are the top three.
• The markets most chosen as “massive” opportunities for the agriculture sector are India (41 per cent) and the rest of Asia outside of China and India (41 per cent). One-in-five say both the domestic Canadian market (21 per cent) and the US/Mexico (20 per cent) are massive opportunities.
• Beyond the top three threats to the sector already mentioned, input affordability, farm income and debt, human resources, and climate change were all chosen by at least one-in-three survey participants, making up a secondary tier of risks.
• Opinions among famers, government workers, civil society, and others in the farming industry diverge in some areas. While no group is overly confident that solutions to the top three challenges will be easily discovered, those in government are more confident in government problem solving and less confident in the private sector.

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“This funding will improve the National Index on Agri-Food Performance, helping the sector take advantage of market opportunities, and backing up our efforts with concrete data,” said federal ag minister Lawrence MacAulay in a news release today.

The National Index on Agri-Food Performance is a Canadian-made sustainability measurement system under development by a coalition of government and industry groups including agro-chemical companies like Nutrien and BASF, and provincial agriculture departments.

The index spans measures from water stewardship, soil health and greenhouse gas emissions to nutrition, safe food, financial viability and sustainability, work conditions and animal care. It’s been touted as a way for the industry to measure its own performance before it’s measured without any industry say in methods used.

A pilot version of the index was published in May of 2023.

The Canadian Agricultural Policy Institute (CAPI), which houses the project, will use the announced funding to continue to refine the index, fix missing information and create an upgraded version of the index, the federal news release said.

Earlier this month, the Centre for Agri-Food Benchmarking launched.

“The Centre, housed at the Canadian Agri-Food Policy Insitute (CAPI), will accelerate and formalize the work of the unprecedented coalition of 137 partners supporting the National Index,” a Feb. 7 news release said.

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The report, titled Forces Impacting Animal Agriculture In Canada: A Synthesis, delves into the issues surrounding cattle, dairy and poultry production in the country and how it is interconnected within various factors in day-to-day life of residents.

Al Mussell, CAPI’s director of research, said the report draws from a lengthy technical report and while both that and the Synthesis document come to the conclusion of the importance of animal agriculture, the actual economic impact may not be so clear.

“It makes the point, and really drives home, that animal agriculture is extremely important in Canada. It’s extremely important from an economic growth perspective but it is particularly important regionally in rural areas that otherwise would not have the same levels of employment, levels of income in local communities,” said Mussell.

It’s also an industry that is built on using farming byproducts to increase the value of animals.

The report also highlights that Canada has some of the lowest CO2 emissions from the production of pork and beef, outclassing Western Europe, South America and Australia.

As well, the report highlights that farmers are the most trusted people in the Canadian food system and that animal agriculture in the country produces $90 billion in sales, 164,000 direct jobs and roughly two-and-a-half times that in indirect jobs.

The importance of animal agriculture provides options to farmers whose crops have been ravaged by hail and drought, and enhances pasture lands through grazing.

Mussell said such points can get lost in the complexity of the agricultural food production system.

“The motivation for writing this report, this major initiative on our part, comes out of the concern there are quite a number of people who need to be involved in decisions that relate to animal agriculture but don’t bring particular expertise to it,” said Mussell.

“Those people are in a difficult spot because there is always a tendency to fall into a subset of isolated facts that might take you in a particular direction when in fact this is a much more complicated type of a system.”

The report is designed to provide a well-rounded perspective to such decision makers to offer a balanced understanding of the value of animal agriculture and its importance to many communities.

“In Canada, we have an excellent animal agriculture system. It’s not perfect. There are problems. There are challenges and they need supportive policy to make headway on those challenges,” Mussell said.

One is the continuing diminishing of cattle inventories in the country over the past two decades.

On the other side, the positive parts of the industry when it comes to improving biodiversity through responsible grazing techniques might not be fully understood, Mussell said.

“You look at what we are able to do today to make better use of grasslands, lighten up the footprint of animal agriculture within that — pretty impressive and that’s over and above the basic conversion efficiency of animal agriculture.”

That conversion efficiency applies across Canada and involves calculating land not suitable for crop production and otherwise would be wasted if it were not used for livestock feed, said Mussell.

“We manage all of this in a manner which is profitable for each of the segments involved and which also supports communities that can work together to deal with the many issues that can come up and mitigate those by working together,” said Mussell.

The Forces Impacting Animal Agriculture In Canada: A Synthesis report can be found on the CAPI website.

— Alex McCuaig reports for Glacier FarmMedia from Medicine Hat, Alta.

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